GBP/USD pinned to 1.3100 after a gap lower on fresh Brexit angst

The Sterling is in retreat as Brexit headlines continue to deliver more bad news than good.
Hopes for a clean agreement ahead of Wednesday's summit are evaporating.

Joshua Gibson FXStreet

The GBP/USD is slumping into a notably bearish stance heading into Monday's London market session, struggling near the 1.3100 handle after weekend Brexit headlines drove the Pound into a bearish gap to start the week's trading, and the door remains open as buyers have been unable to close the gap.

Brexit back under a microscope as tempers flare

Brexit concerns have taken a harder edge for the upcoming trading week as the UK and the EU scramble to salvage a last-minute working deal ahead of Wednesday's European leader summit, where the outline of a plan was hoped to be presented. Eurosceptics that are populating the UK's parliament are increasingly calling for an all-out rebellion against UK Prime Minister Theresa May, with former Brexit Secretary David Davis lashing out at the PM for attempting to squeeze through a deal that would see the UK restrained within the EU's customs union for an undefined amount of time following Brexit, a solution that has severely angered the Brexiteer contingent.

Monday is a thin showing for the Cable on the economic calendar, and GBP/USD traders' attention will be split between Brexit headlines and Monday's upcoming US Retail Sales figures, due at 12:30 GMT with the headline core Retails Sales forecast to hold steady at 0.3%.

GBP/USD levels to watch

The Sterling is seeing hard pressures at the 1.3100 level after slipping on the market open, and Sterling bulls will have their work cut out for them if they're going to close Monday's gap to 1.3150, while the downside sees near-term swing lows from early October marking out a floor from 1.3030, and according to FXStreet's own Valeria Bednarik, "in the daily chart, the pair offers a neutral stance, as the pair held above a flat 20 DMA, while technical indicators turned lower, the Momentum confined to neutral readings and the RSI currently at 55, both lacking directional strength. According to the 4 hours chart, the pair risks extending its downward move, as it settled below a still bullish 20 SMA, while technical indicators maintain their bearish slopes in negative territory."

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

USD/JPY meets support near 157.00

USD/JPY retreats for the third consecutive day on Friday, revisiting the 157.00 region before attempting some recovery as investors continue to assess the latest BoJ meeting, where the central bank left rates unchanged, as widely anticipated.

Gold sinks to fresh yearly lows despite risk-off mood as Fed rate hike bets weigh

Gold slips to fresh year-to-date lows on Friday. The metal struggles despite a risk-off mood across markets, as expectations of further Federal Reserve (Fed) interest rate hikes continue to dominate price action, leaving Gold on track to end the month in negative territory.

Ripple Price Forecast: XRP bulls defend $1.20 as sell-side pressure triggers liquidations

Ripple (XRP) trades around $1.25 on Friday, rising from a short-term support level established at $1.20. This minor upward correction follows a sharp sell-off, triggered amid reports of a hack attack on the Binance exchange that impacted approximately $6.3 billion. The attack drove the broader crypto market on edge, as Binance suspended both deposits and withdrawals to contain the situation.

BoJ recap: A pause for now... but Japan has entered a new inflation phase

The Bank of Japan left its short-term policy rate unchanged at 1.25% but delivered a distinctly hawkish message on the risk of an inflation overshoot. The decision passed by 8-1, with board member Takata dissenting in favour of an increase to 1.5%, while Governor Kazuo Ueda stressed that the Bank would continue adjusting policy as needed.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.